- USD/JPY off the highs, tracks the retreat in the US Treasury yields.
- The US dollar index holds steady, with eyes on the yields.
- Reflation trade and vaccine news will remain in play.
USD/JPY has eased-off session highs but remains well bid above 105.50, as the bulls continue to ride the reflation wave higher.
The spot piggybacks the moves in the US Treasury yields, especially the benchmark 10-year ones. The 10-year US yields retreated from yearly highs, dragging USD/JPY lower alongside.
Further, the south turn in the S&P 500 futures also weighs negatively on the spot, as the bulls face rejection once again just shy of Friday’s high at 105.75.
Amid a lack of fresh news on the Japan docket and a light US calendar, the risk sentiment and the Treasury yields price-action will be closely followed for fresh incentives on the major.
USD/JPY technical levels
“The USD/JPY bulls eye 106.00 as an immediate resistance ahead of the monthly peak surrounding 106.25. Meanwhile, a downside break of 10-day SMA, at 105.28 now, needs to break below the immediate support line from late-January as well as the stated channel’s lower line, near 105.00 and 104.75 in that order, to recall the USD/JPY sellers,” FXStreet’s Analyst Anil Panchal explains.
USD/JPY additional levels
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